In its recent drilling of 48 holes covering 46,060 meters (46,060m), the company, in general, discovered two mineralized veins and extended existing mineralization at the large property in Mexico.

Specifically, one of the newly identified veins, the Venadas, with its northeast orientation, sits between but runs crosswise to the northwest-traversing Valdecanas and Juanicipio veins. MacKenzie highlighted that "the negligible reported base metal grades and vein style/elevation comparisons to that of the Valdecanas vein suggest that drilling to date has only just tested the top of a potentially more expansive mineral system to depth."

This bodes well for future resource expansion and could "provide a development link" to the Juanicipio vein that was excluded from the 2017 updated preliminary economic assessment.

The second recently discovered vein, the Pre-Anticipada, is located about 50–100m further into the hanging wall from the subparallel Anticipada vein, MacKenzie described. Pre-Anticipada was intersected by holes targeting the Valdecanas vein Deep zone. Highlight assays from the new vein included 472 grams per ton (472 g/t) silver (Ag) over 3.2m, 768 g/t Ag over 1.80m and 1,256 g/t Ag over 1m.

As far as mineralization extension, stepout drilling at Valdecanas' Deep East and Deep West zones extended high-grade mineralization to depth, relayed MacKenzie. Notable intercepts included 1,297 g/t silver equivalent (Ag eq) over 6m, 637 g/t Ag eq over 13m and 535 g/t Ag eq over 10m. "The higher precious metal grades observed at depth within the Deep zone are thought to be a later overprint and the product of a stacked/fluctuating boiling horizon," he added.

The analyst concluded, "Overall, the results of the release continue to highlight the significant exploration upside associated with the Juanicipio project and future potential to materially expand the project's overall resource base."

Drilling continues at Juanicipio, with one directional rig dedicated now to the Valdecanas vein and two conventional rigs focused on other targets there. The next big catalyst for the stock, however, MacKenzie indicated, is a formal Juanicipio construction decision by MAG's joint venture partner, Fresnillo.

Canaccord Genuity has a Speculative Buy rating and a CA$21 per share target price on MAG Silver, whose stock is trading at around CA$13.90 per share.

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Disclosures from Canaccord Genuity, MAG Silver Corp., March 5, 2019

Analyst Certification: Each authoring analyst of Canaccord Genuity whose name appears on the front page of this research hereby certifies that (i) the recommendations and opinions expressed in this research accurately reflect the authoring analyst’s personal, independent and objective views about any and all of the designated investments or relevant issuers discussed herein that are within such authoring analyst’s coverage universe and (ii) no part of the authoring analyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the authoring analyst in the research.

Required Company-Specific Disclosures (as of date of this publication):

Canaccord Genuity or one or more of its affiliated companies intend to seek or expect to receive compensation for Investment Banking
services from MAG Silver Corp. in the next three months.